Legal Update• Fair Housing• Competition in Real Estate• Proposed Team Rules • FREC update• General Data Protection Regulation

Fair housing: Federal LawWho is protected?

• race• color• religion• national origin• sex• disability• familial status

New County Fair Housing LawsMiami Dade:• ancestry• pregnancy• age• marital status• gender identity• gender expression• sexual orientation• source of income, (Section 8 vouchers)• actual or perceived status as a victim of domestic violence,

dating violence or stalking

Broward• age• marital status• political affiliation• sexual orientation• pregnancy• gender identity or expression• veteran or service member status• lawful source of income, (Section 8 vouchers)• victims of dating violence, domestic violence or stalking

Exemptions?

• Dade:similar to the federal fair housing laws, as well as exemptions regarding housing for older persons and communities restricted as 55 and over.

ExemptionsBroward:

Similar to federal fair housing laws, as well as exemptions regarding housing for older persons and communities restricted as 55 and over.

What’s the real issue?• Discriminatory advertising

• Specifically Section 8

Why are Realtors being sued?• Private action allowed in both

ordinances• Specifically covers real estate

professionals• 1982 Supreme Court decision

Section 8?? What do we do?

• Absolutely no advertising “no section 8”• You must accept section 8 applications

If I am sued what do I do

• Lets talk about options.

Competition in Real Estqte

• FTC/DOJ workshop• Expiration of VOW DOJ settlement

– Conclusion: Competition is alive and well

Proposed Team Rules

• Approved by FREC, currently headed to review by the Joint Administrative Procedures Committee (JAPC)

Team Rules to come:• Team names may include the word “team” or

“group”• No team name may appear in larger print than the

name or logo of the registered brokerage• No team name may include words like: Realty,

Real Estate, Associates, Brokerage, Company, LLC, or similar words

More on Teams• Broker must identify a designated licensee

responsible for ensuring compliance with advertising rules

• Monthly, the registered broker must maintain a current written record of each team’s members

• All team advertisements must comply with this rule within 12 months after the effective date

General Data Protection Regulation GDPR

• The “right to be forgotten• The “right of access” • The “right of rectification” • The “restriction of processing” • The “right to data portability”

Was an Opt OutNow an Opt IN

• Website functionality issue– Need affirmative consent to collect and

use consumer data if they are from the European union.

– Terms of use issue

New Ethics Rule: Misleading Images

• Article 12: Standard of Practice 12-10• Realtors must present a true picture in their

advertising and representations to the public include internet content, images, and the URLS and domain names they use . . .

• Realtors are prohibited from misleading consumers, including use of misleading images

New Ethics Rule: Misleading Images• Today’s software tools allow agents to market

property interiors and exteriors with the aid of computerized images such as of furnishings, fixtures and paint colors. The question is this kind of marketing allowed under the Code of Ethics?

• If the virtual alteration to the photos makes the property appear rehabbed, remodeled, and in pristine condition for move-in; but in reality it is not, it could be a violation of Article 12

New Ethics Rule: Misleading Images

• Solution: disclose in a conspicuous way that the images have been altered or enhanced so the viewer understands the property looks different than the image before them

FREC Update• Escrowed Funds: Be very, very careful

– Associate received funds from buyer, but did not give them to broker. Refused to refund money to buyer because buyer filed a FREC complaint: Revoked

– $1,000 deposit in operating account. Refunded when able: Revoked. Upon appeal and reconsideration, reduced to $1,500 fine, 3 hour escrow management course, 30 hour broker course

– failure to conduct monthly reconciliation of escrow because she considered bank statements good enough: Revoked

FREC Update• Duty to report criminal convictions

– 475.25(1)(p)Has failed to inform the commission in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony.

– Agent failed to notify FREC of DUI: $750 fine, attendance at FREC meeting, ethics class, 12 months probation

FREC Update• Property Management

– Associate collected rent and handled maintenance, but not in the brokerage name: 10 day suspension, $1,000 fine, 28 hour course

– Associate collected rent and fees outside of a real estate company, pursuant to a property management agreement. Dispute with LL over washing machine repair yielded a FREC complaint. FREC concluded she acted as a broker by collecting rent and fees: 6 month suspension, attend 2 FREC meetings, training

FREC Update• Cooperation with FREC investigation

– Broker failure to maintain records and failure to attend FREC audit: demotion to sales associate, $500 fine

– Licensee failure to respond to FREC inquiry: $2,000 fine, reactivation course, 14 hours of continuing education

Associates Changing Brokerages• Carefully review the entire independent

contractor agreement (ICA), and look specifically for clauses such as the following:– Term: when does the ICA term end?– Notice: does either side need to give notice to

terminate the ICA early?– Listings: what happens after the ICA is terminated?– Payment: what is the payment structure after the ICA is

terminated?

Associates Changing Brokerages• Every ICA is negotiable, so check your actual agreement first! As an

example only, the Florida Realtors Form ICA provides the following:– Term: Section 5 provides “This Agreement will be in effect for [ ]

year(s) from the effective date.”– Notice: Section 5 provides “Either party may terminate this

agreement by [ ] days’ advance written notice to the other party.”– Listings: Section 2(d) provides “…listings taken during the term

of this Agreement are Broker’s property.”– Payment: Section 3(c)(6) provides that the broker will pay

associate any amount earned before termination “less amounts owed to Broker and amounts Broker must pay another licensee to complete pending transactions.”

Associates Changing Brokerages

• Associate and broker should collaborate to ensure a smooth transition, including informing clients and customers of the transition.

• When that is not feasible, broker should take the lead on communicating with clients and customers.

Associates Changing Brokerages• Some ICAs will affirmatively direct that pending transactions

and listings transfer with the associate to a new brokerage• Assuming the new broker is willing to accept the assignment,

brokers should document this occasion with an assignment or possibly a formal letter from former broker to new broker

• Communication with all parties (sellers, buyers, landlords, tenants, closing agents) is vital to ensuring a smooth transition

The Inspection Report Hot Potato

• What responsibilities do sellers/listing agents have regarding an inspection report ordered by some other 3rd party?

• Example: buyer 1 terminates a contract, forwarding a copy of the report to explain the rationale

The Inspection Report Hot Potato • Must the report in seller’s possession be

provided to a future buyer ? No• May it be provided to a future buyer, if seller

didn’t pay for it? Typically yes• Can seller ignore an inspection report within

their possession, as it relates to a future buyer? It depends, but most likely NO!

The Inspection Report Hot Potato • 1985 Fl. S. Court decision Johnson v Davis

– Must disclose facts materially affecting value of property, which are not readily observable and not known to buyer

– Applies to residential property– Applies to as is sales– Applies to licensees as well as sellers

The Inspection Report Hot Potato • Disclose what is necessary per Johnson

v. Davis • Verbal disclosure is sufficient under the

law, but prefer you document that the verbal discussion occurred in writing, in your notes or email

• Update any existing seller disclosure form if using one

The Inspection Report Hot Potato

• What if seller wants you to ignore the report?– NO! There is no safe way to ignore it– Potential civil liability, license law

violation, and ethics violation• Potential Seller default under listing agreement• Must you inform the new listing agent of the relevant

content of the report? No